NYT - Honk if You Think It's Over!

I agree, although I have to admit that lately I've been entertaining a mild concern that things will simply bump along where they are now for a year and then zoom off into the stratosphere again. It's just a little niggling concern, though.

Into the stratosphere.. and who will be lending, at what interest rate? on whose job? Drank some cool-aid?

i for one find it comforting that the times real estate section has returned to being a flat our advertisement again. for a minute there was almost some journalism going on and it just seemed wrong.

flat ouT advertisement. :)

Jason could I ask u for advice privately?

ask me for advice? sure. but i am the first to admit i don't know so much about real estate in general. i've seen many 2 bedroom apartments mostly in the chelsea area during our search but thats about it. we also looked a little in the west village, hell's kitchen, tribeca, flatiron and had a few weekends where we almost thought we could live in brooklyn again but were cured of that relatively fast. not a knock on brooklyn more a knock on weekend subway service in nyc.

We're actively looking to buy (I know, I know, if we could only wait for 2 more years we could save some $$, but life is short and we're looking for a home, not an asset play) Anyway.... I thought the NYT article was very representative of what we're hearing and what we're seeing. Our broker, who's with one of the big firms, says that his office is definitely seeing more deals, contracts and closings but it's almost entirely first-time buyers (although not like the guy in the Times who's spending $1 million as a starter - yikes, who does that?). He also says that this activity is clouding the fact that prices are still headed down and that there are few qualified buyers (with good credit scores, cash in the bank, ability to get a mortgage, etc.) for most of what's on the market.

Sorry, it was for the other Jason.He lives in Harlem. My mistake.

Thanks, NextEra and Euro. I admit the Kool-aid was tempting me with its syrupy artificially-sweetened goodness.

NextEra, ev - I think what's interesting with the article is that all of the examples are units that have seen tremendous price chops from the peak in 2007. Those types of price chops (even if they generate activity for some small group of units) are just not common in the overall market. If we could, as an example, purchase #928 at 15 Broad St, which is an 856 sq ft loft that sold for $595,000 in May, 2007 for say somewhere between $410,000 (a 32% price chop equivalent to the deal that the NYT buyer of the $925k loft got) or maybe even $299,000 (equivalent to the price chops at the high-end properties in the same article), we'd ALL be in this market. The problem with the NYT author's argument is that the typical unit in Manhattan is not seeing this kind of price drop (perhaps this article is more a lesson for sellers?)

http://downtowny.blogspot.com

Downstoner, actually this article is one of those in which the content has no relation to the headline. None of the people interviewed/quoted in the piece "honks". I mean, they all admit the market is not stabilizing and most likely has further to fall. And they're all realtors. So it's one of those trying to strike an uplifting note in a catastrophe, and it shows. I think it's the point were the disconnect occurs between realtor and stubborn seller. The realtors are celebrating the increased volume, whereas the sellers may be lamenting the decreasing price. The author, Josh Barbanel, states the market is 30% down from peak at least 3 times in the article and with most interviewees saying it'll fall at least 5-10 more, you have realtors forecasting 40% chops essentially. So our dear Alpine is a solitary contrarian voice even among his peers.

"I know, I know, if we could only wait for 2 more years we could save some $$, but life is short and we're looking for a home, not an asset play"

Wow! I feel the same way.

It will only be over when people stop asking....

I'm not surprised Carol, since you're a realtor.

If you think $1M is a lot for a starter apartment, Dave Gahan (any other Depeche Mode fans out there?) recently sold his 99 Jane Street apt for $4M to an individual who, according to linkedin, is museum intern, about 2 years out of undergrad.

See http://therealdeal.com/newyork/articles/depeche-mode-singer-buys-and-sells-dave-gahan-99-jane-street-riverhouse

I was born to the wrong parents.

Dave Gahan...he cleaned up and is sober... well selling his home in this mkt bf the second leg down is sure sign he's all back. People R people so, why should it be, you and I get along so awfully...dum dum dum dum... (all from memory!)...

Its a competitive world--everything counts in large amounts!

OnTheMove, I have the same problem: wrong parents.

Aside from a whole bunch of excellent articles by Christopher Gray, I've found the NY Times Real Estate section articles to be a bunch of regurgitated blather from Brokers who say whatever it is that they need to convince their exclusive listings of that week. 6 months from now there will be some other HY Tomes RE section article saying the exact opposite of whatever they are saying this week - not just about what is happening then, but about what is happening now (i.e. they have no problems with revisionist history).

nice nice nyg

"Dave Gahan (any other Depeche Mode fans out there?) recently sold his 99 Jane Street apt for $4M to an individual who, according to linkedin, is museum intern, about 2 years out of undergrad."

II corrected your statment below:

"Dave Gahan (any other Depeche Mode fans out there?) recently sold his 99 Jane Street apt for $4M to the parents of an individual who, according to linkedin, is museum intern, about 2 years out of undergrad."

I doubt Mr. Museum Intern qualified for the mortgage on his own.

PR Man to NYT connection.

"come on man!!! our deal was for a positive piece on RE. I know your reporter could find anyone to agree with what I'm paying you for but, for Pete's sake at least give me some spin on the headline!

NYT, the boneless chicken breast of American journalism.

NextEra:"I know, I know, if we could only wait for 2 more years we could save some $$, but life is short and we're looking for a home, not an asset play"

CarolSt: "Wow! I feel the same way."

Actually life is painfully long and if people could just practice some patience and perseverance than I am convinced that real estate will move towards a more realistic level. A level that does not require any in NYC who is not receiving a subsidy to be a high-net worth individual simply to own a home.

I have stated this before but I am convinced that we are about six months away from a real tipping point that will bring price levels down to true affordability. 2003/2004 that is the price point I want to see before I feel as if prices are attractive. But every time another person is tired of waiting "forever" (i.e. a whole two years) to get that apartment is another step towards continuing irrational pricing in NYC real estate.

The worse is still yet to come for both stock market and NYC real estate. Housing is still falling even after all the major banks (including Fannie and Freddie) had stopped foreclosures. Now that it has been lifted, conditions will be getting much worse over the next several months. Now imagine the loses the banks are going to accumulate on top of the trillions already. Need I remind some people that nothing has still been done about the toxic assets. Oh sorry "legacy" assets. More major institutions will go under before this crisis is over. Either by "merger" or out right bankruptcy. Or our govt will make the fatal choice to save another and it will be rewarded by a currency collapse and the US being downgraded. Make no mistake, we are one terrible decision away from some very scary outcomes.

I can appreciate that renting long term doesn't sit well with people... We have just come through an anomalous time in history. People may look back on 2004 to 2012 as one of the longest periods where renting made absolute sense.

i respect the NYT but if there is one section of the paper that is wholly owned by the industry it reports on it is the real estate section. it is a disgrace. don't believe me? read this NYT article on real estate from august 2007:

http://www.nytimes.com/2007/08/19/realestate/19cov.html

it quotes only brokers who fill the article with dire warnings of missing the next big run in NYC RE. Too bad they had it wrong, the next big run was down. the usual bullcrap is in this article: foreigners, empty nesters and parents of spoiled children swooping down and buying apartments those of us who live here need; interest rates very low but going higher, market going to scream higher without you, rents rising too so you better buy, Manhattan immune and apart from the rest of the country.

it is no mystery why the nyt has it's tongue firmly implanted in the derrier of the dolly lenz's of the world: they are in dire fiscal shape and RE classifieds remain one of the few cash cows left. just pathetic for the "paper of record".

very well said cfranch, don't forget the "weak dollar" argument, which is also in Josh's article :)

To be fair though, the Times does run some articles that are more constructive - Teri Karush Rogers has written some great headliners including the classic on troubled condos:

http://www.nytimes.com/2009/02/08/realestate/08COV.html?partner=rss&emc=rss

and other pieces such as buyers walking away from 6 figure deposits. The "Honk" article really takes the cake though and is as close as any piece I've read in the Times in months that should be labeled "Advertisement". At the very least, Josh should have mentioned that all of the units in his article sold for at least 30% below 2007 prices - now that's a story.

http://downtowny.blogspot.com/2009/06/apparently-1-million-all-cash-starter.html

On a year-over-year basis, is the pace of transaction up, or is it just up seasonally. Is the year-over-year activity comparison better now than in Q1?

Sorry, found my answer. Wow this is what we call a flurry of activity? Was Q1 off vs.last year by more or less than 55%. What a joke.

"As of the end of May, the overall number of apartments closing in the second quarter was off 55 percent from the same period a year earlier, though up slightly from the first quarter."

So here's an interesting bit of info - at an (empty) open house today, the seller's agent actually had photocopies of the "Honk" article for buyers to read, right next to the floor plans and the monthly cost calculation sheets...

http://downtowny.blogspot.com

Of course there are going to be transactions at every new jerk lower the market takes. Pretty soon, the folk who think -30% is cheap enough are all going to be spoken for...

Any update from Rhino?